Rental drops around Australia and what it means for tenants
New reports show that rental vacancy rates around Australia continue to be low and it looks like tighter rates will remain this year, which would mean good returns for investors but a bad one for tenants. In December, reports showed that there was a slight increase in the number of available rentals with 1.7 percent according to Domain’s monthly vacancy Rental report, but it’s a 2.4 percent increase from January 2021.
Typically, January sees a decline in strong demand due to the fact there’s a squeeze going on with the available supply. Experts have pointed out that there has been an increase in vacancy rate all over Australia, except in Hobart and Adelaide. However, it is also expected to go down which means that tenants will find it harder to find a home to rent especially in smaller markets in Australia, while in most of the country it’s going to be a landlord’s market where the rental vacancy rate is below 3 percent. In some areas, there’s already a rental crisis observed, while Sydney and Melbourne remain to have fragmented markets. The suburbs, however, have more available rental homes compared to others.
On a national level, statistics show that from 54,000 dwellings in December 2020, the dwellings have decreased to 37,000 in December 2021. That’s a 31 percent decrease which indicates an unfortunate rental vacancy rate.
Major markets, like Sydney is at its highest rate since May 2021 with a vacancy rate of 2.6 percent, which is the same rate recorded a year before when the pandemic has not affected the population and caused a surge in vacancy rate. By the end of December, total listings recorded were 15,000.
In Melbourne, records show that the vacancy rate is down 2 percentage points from December 2020, which was at its peak when the lockdown was extended. At the end of last month, recorded listings were at 16,000 estimated vacant rentals. In the Melbourne CBD, which was known to have been affected the most by the pandemic, records show that from 14 percent last year, it’s now at 4.5 percent according to Domain.
Experts explain that this could be the result of landlords selling property with little prospect of international students coming back, due to the pandemic. 2 years prior, these international students fueled the rental market. Looks like the possibility of these students coming back anytime soon is bleak.
Domain chief of research and economics, Dr Nicola Powell adds, “They’re seeing how much rents have fallen and how much bang they can now get for their buck, and are moving out of shared households, now able to afford to live on their own.”
Rental housing has made it possible for so many to have their own space, and with these new challenges should come new adjustments to cater to more people. Xotel remains in partnership with projects and initiatives for our community to be able to put a stop to homelessness.